Question 33 from UPSC CSE 2025 - Economics

Question

Consider the following statements:
I. India has joined the Minerals Security Partnership as a member.
II. India is a resource-rich country in all the 30 critical minerals that it has identified.
III. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957, empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals.
Which of the statements given above are correct?

IASCODEX · Accepted Answer

Correct Option: C. I and III only

Strategy: Identify international initiatives and legislative changes relevant to India. Statement I becomes evident since India's membership in the Minerals Security Partnership was widely reported in 2023. For Statement II, remember India remains import-dependent for key critical minerals such as lithium and cobalt, so it cannot be resource-rich in all identified minerals—this is an extreme claim, which should be eliminated. Statement III refers to a prominent amendment in 2023 to the MMDR Act, which gave exclusive auction powers for some minerals to the Central Government—this is correct. Choose the option covering I and III only.

Key Info: Minerals Security Partnership (MSP): A multilateral initiative launched in 2022, designed to strengthen global supply chains for critical minerals crucial for clean energy, semiconductor, and high-tech sectors. India joined as the 14th member in June 2023; other members include the US, EU, Japan, Australia, Canada, and partners in Europe and East Asia. MSP focuses on securing access to minerals like lithium, cobalt, nickel, and rare earth elements.

Critical Minerals in India: The Ministry of Mines identified 30 minerals as 'critical' in 2022 due to their essential nature for economic and national security interests (examples: lithium, cobalt, nickel, titanium, and rare earth elements). India lacks domestic reserves or large-scale production for several of these minerals, particularly battery metals (lithium, cobalt) and certain rare earths, resulting in import dependence from countries like China, Australia, and South America.

Mines and Minerals (Development and Regulation) Act, 1957 and 2023 Amendment: The MMDR Act is India's principal law regulating mineral resources. The 2023 amendment empowered the Central Government to conduct exclusive auctions for mining leases and composite licenses for 'critical and strategic minerals' (defined in Part D of the Act's First Schedule). This shift centralized control over certain high-importance minerals to ensure secure supply chains and strategic oversight.

Contextual Significance: Critical minerals are vital for sectors such as renewable energy (solar panels, wind turbines), electric mobility (EV batteries), electronics, defense manufacturing, and advanced technologies. India's policies aim to address vulnerabilities in supply chains and minimize external dependency while positioning itself in global critical mineral alliances.

IASCODEX · Answer

Option A: I and II only

IASCODEX · Answer

Option B: II and III only

IASCODEX · Answer

Option D: I, II, and III